Is your business utility bill complicated? Or are you just overwhelmed by the amount of information and detail it contains?
Ofgem has implemented a new rule that pushes energy suppliers to input all essential information needed to a utility bill.
According to YouGov, 60% of the UK’s energy consumers find energy bills very confusing and daunting to read.
These customers even say that energy suppliers provide the worst and most complicated bills compared to water and phone companies.
Using energy price comparison sites like Better Business Quotes can help when you want to switch suppliers & tariffs.
What is in a Business Utility Bill
The amount of energy you’ve consumed and how much you owe the supplier can be found in every single utility bill.
But, there are other crucial information you should be looking at in your energy bill. Below are the key parts:
The Overall Amount You Have Consumed
The first and most important thing that can be found on your energy bill is the amount of gas and/or electricity you have consumed in a span of a month.
You will find out how much you are paying for each kWh or unit.
Dates and Time Period
Another thing you will find in your bill is the date and time (or the Time Period).
This shows you how much gas and electricity your business consumes in a year.
With this information, you will be able to determine your peak hours. Save your previous bills to find out how much your energy usage fluctuates over the course of 12-months.
For example: your business consumes a lot of electricity during summer by leaving the Air Conditioning on for too long, which could lead to high electricity bills.
Whether Your Business Utility Bill Was Estimated or Based On An Actual Reading
This usually depends on what meter your business is currently using.
If you are using a standard meter, there may be instances where your supplier will provide you with an estimated bill that is based on your previous consumption.
This happens when the energy company doesn’t have an updated reading of your meter.
Consumers normally send the readings to their suppliers manually. Unless, of course, you’ve hired an agent or representative to perform the readings for you.
However, if you’re using a smart meter, there is no need for you to read your meter update your provider. Smart Meters automatically provide your suppliers with an actual, and much more accurate reading.
An estimate of how much your energy will cost in the next 12-months based on your current average energy usage & previous consumption will also be shown in your invoice. This is Personal Projection.
Here is a sample of Personal Projection:
Ofgem implemented this new method in 2014. They aimed to give customers a clear idea of how much they could be paying in the next year.
If you are on a fixed contract, your personal projection will adjust once you reach the end of your contract.
It’s important to note that this method automatically assumes that a consumer does not take any action once their current plan ends. So, an expensive rollover plan is then included in the personal projection calculation.
However, the Personal Projection could help you determine whether you’re on the right tariff or not. If anything, it’ll help you make the decision to switch.
Your Current Plan/Contract
You will find the type of contract/plan you are on in your business utility invoice. This information plays a big role on how much you pay.
This information can also be used when you are planning to compare business energy quotes and tariffs in the market to see if you’re still on the best one.
Your Preferred Mode of Payment
You can find your preferred payment method (Direct Debit, monthly, etc) in your business energy bill.
Also, keep in mind that customers that have chosen to pay their bill by Direct Debit often get offered a whopping discount by most suppliers.
If you wish to change your mode of payment, feel free to contact your supplier.
Your Contract’s End Date
Just in case you forget, your provider has conveniently included the date your contract will end. The invoice will also indicate the obligation to pay an exit fee (and how much it could cost you) if you wish to cancel the contract before the agreed date. Otherwise, contact your supplier immediately.
However, you should receive a call from your supplier 49 days before your contract expires. They will inform you on how much your energy could cost if you do not choose another contract or switch suppliers.
Meter Reference Number
The meters that are supplying your premises come with a unique ID number: the Meter Reference Number.
Meter Point Reference Number (MPRN) and Meter Point Administration Number (MPAN) are 2 different types of meter numbers. You will be able to determine what type of Meter Reference Number you have by checking the number on your bill.
This unique set of numbers is very crucial, especially when you want to switch suppliers, so that they may be able to ensure that they are switching the correct energy supply.
You can find these unique numbers in 7 boxes beside the letter ‘S’ in your business utility bill.
Quick Response (QR) code
Since we are now living in the digital age, all business and domestic energy bills already come with a Quick Response or QR code. Suppliers put these codes on a bill.
This is a very handy code that can provide you with relevant information regarding your annual usage, supplier details, and tariff name.
You can scan these unique barcodes using a smartphone’s camera or an external application which can be found in your app store.
This is a handy way of finding out more about your energy bill and comparing deals. You need a QR code scanning app and a smartphone to use it. You should be able to get a suitable app, along with instructions on how to use it, via your smartphone’s app store.
This barcode has helped thousands of energy consumers UK-wide find better tariffs since it is much faster than manually typing down your details or hunting out for important info.
How is my business utility bill calculated?
The consumption for gas and electricity is measured in kilowatt-hours (kWh).
Depending on your tariff, you may be charged a fixed cost for each kWh consumed.
Remember, energy costs not only vary depending on your supplier, it can also differ depending on the region you are in.
Unless you are on a no-standing-charge tariff, you will be charged a fee called Standing Charge which is priced in pence daily.
The standing charge is used to accommodate the labor your energy supplier goes through in order to give you access to electricity and gas.
Secondly, the Unit Rate is a fee that you pay for every kWh of energy you consume.
These are mainly the 2 things that make up the price of your energy bill, including the government tax (VAT).
However, take note that discounts may also take place, especially if you are paying your bills by Direct Debit!
What Is A Back Bill?
A Back Bill is a duplicate bill.
There could be 2 reasons why this happened:
1. Errors or inaccurate billing from your supplier
Believe it or not, this is pretty common.
Energy suppliers tend to send duplicate bills to households and small businesses to either: inform you that you have either over or underpaid your bill.
These errors typically include incorrect fees or direct debit taken, and wrong tariff details that have been inputted by their internal system.
Surprisingly enough, a lot of these mistakes go unnoticed. Business energy customers rarely go through their utility bills to check for any mistakes.
2. Estimated Billing Errors
If you haven’t supplied your energy provider with regular meter readings, they will start to estimate your consumption based on the average of your previous usage for the past year. Unfortunately, since estimated billings can be quite dodgy and inaccurate, it’s pretty likely for energy companies to discover that you have been paying way less than you should.
In turn, you will end up owing money to your supplier which can be shocking and stressful. So if you’re currently using a standard meter, make sure to submit regular meter readings to your supplier while you can. Or ask them to send an agent or representative to your area should you need any help or guidance with reading.
Ofgem stated in their website that: energy companies are NOT ALLOWED to charge their consumers for gas and electricity that has been consumed over 12 months ago, despite being incorrectly billed by the supplier.
Second, energy suppliers must be clear with these terms in their terms and conditions.
If you are unable to pay your business utility bill, you have the option to ask your supplier for a repayment plan.
Find out more about back billing here.
At the end of the day, you will be able to save more money on business utility bills when you learn how to decode every bit of information in it.
Once you understand whatever’s in your business utility bill, you can:
- Finally check for any inaccurate billings or errors which can prevent you from experiencing stressful situations and more expenses. No more overpaying/underpaying for business gas and electricity!
- Notice any changes in your tariffs right off the bat.
- Determine if you should switch to a different supplier.